The bigger perspective to learning a new thing

Anyway – apart from that I’ve spent this weekend in a field in the Welsh borders meeting a bunch of new people and not thinking about trading at all.

Well, that’s not strictly true. I’ve been thinking about why I started this enterprise, why I started blogging about it and where I’ve got to so far. Here are some thoughts, keeping in mind my lack of financial success to date…

I began looking at trading primarily to generate another income stream on top of my job as a project manager. Over the years as an employee I’ve become somewhat disillusioned with the quality of management/people I report to.

While there have been some notable exceptions there seems to be a lack of decision making skill/competence which frankly makes me nervous. Hence a quest for a level of independence outside of the arbitrary and flawed decision making of others.

On this basis I was swept along on a wave of boundless optimism/enthusiasm as I believe a lot of new traders are. Some spend ridiculous amounts of cash on courses that promise to make you a ‘SuperTrader’ in a very short space of time. Harry makes this exact point on his excellent site Spread Betting Beginner which is very much worth a read as to the real deal and what to expect. Lots of excellent resources there that I need to go back and have a look at.

It’s amazing, even if you have no actual experience of learning a new subject, that you still have to spend time ‘unlearning’ wrong or faulty ideas. I believe I’ve at least reached this stage having un-learnt the following: –

Trading on 5 minute charts, doesn’t work for me

Looking for the ‘ultimate’ indicator (Holy Grail)

Feeling ‘compelled’ to trade just cause ‘things are happening’ and not wanting to miss out. This has cost me a lot over the last few months

Thinking you have to trade all the time (see above)

Thinking ‘at market’ orders are the only ones to use

Making 10+ trades per day (translation = too excited)

Not being patient or thinking about having an edge

Trading assumptions rather than what’s actually happening

Confusing luck with skill

Ignoring the need for a repeatable strategy

Trading emotionally

Thinking trading is only getting in and out of the market fast

It sucks to admit I’m mostly on the ‘losing’ end of trading. I’m one of the people giving my money to the winners on the other end of the scale. Yes, I’m that nice 😉 so on this basis I ‘parked’ my trading last week and did nothing.

I began this blog purely as a means of recording what I was doing and to garner some feedback as to my progress (or lack of) and because I have been a member of a forum which has essentially died due to lack of actual trading. Of about 60+ members who paid about £2K each to go on a trading course (yes, that’s £120K) I reckon <10% are still trading.

So as you can see I needed fresh ideas, feedback and support from somewhere – thanks for everyone’s comments, feedback and ideas. I’ve also found I enjoy the whole writing process too! Bonus!

Blogging will continue.

My sitting in the Welsh hills also meant I had an opportunity to get some distance from the whole thing. This helped me to come to some important conclusions: –

I have not been treating this endeavour with the seriousness it deserves.

I am still committed to becoming a profitable trader

If I have an ‘off’ day I need to keep looking at the charts the next day rather than avoiding the situation and missing compelling opportunities

I also realised I was still trying to ‘force’ the situation with my trading. I’ll try to to explain what I mean. If you make a decision to get fit then you do not immediately go off and run a marathon or try to bench 100Kg. This is foolish but I think what a lot of beginners expect to be able to do.

When I decided to get fit about five years ago I couldn’t run for 5 minutes. Not only was I carrying too much weight but I’d not done any cardio since I was 18… Not surprisingly I had to learn everything and put the time in running and at the gym. Now I’m probably at 80% of where I want to be. Most of the real progress has come in the last 2 years.

It’s a good thing to have a goal with fitness or trading. However, believing you can go from zero trading experience to gladiator status in a few months is highly dangerous.

Screw up in the gym you might pull a muscle. You also have your body which will have physical limits on how much you can lift, run, whatever.

Your only limit in learning to trade is how much money you put into your trading account. You can lose the entire stack in a week, and I know of people who have done this.

So, as with any sort of training… You will get better, as long as you don’t quit.

I’ll still be trading next week, and the week after that, and the week after that but without trying to force the outcome.

Every trip to the gym builds on the efforts of the previous week, every trade builds on the learning from the last.

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4 thoughts on “The bigger perspective to learning a new thing”

“Feeling ‘compelled’ to trade just cause ‘things are happening’ and not wanting to miss out. This has cost me a lot over the last few months” – Open a demo account that will be your “punt” account. Every time you’re compelled to trade do so, but on the punt account. Not only does it point out exactly how much money this kind of trading will cost you (a virtual small house in my case) but it also scratches the itch that sits there and tells you that you need to trade because something is happening 🙂

Just discovered your blog and I think it is absolutly brilliant – it resonates so well with what i am currently expriencing – I can’t see the analysis for all the baggage (and there is plenty) that I am bringing to trading.
Keep up the good thughts